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Healthways Renews Australian Contract

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Leading well-being enhancement company Healthways (HWAY) recently announced a 5-year contract renewal with Australia’s prominent not-for-profit private health insurer, the Hospitals Contributions Fund (NHF). This contract renewal was based on the anticipated success of the company’s My Health Guardian, Australia’s longest and largest health management program.

As per the agreement, HCF in going to invest A$100 million over the coming years which will help further advancement of this program. Healthways, which is currently focusing on expansion through partnerships, is optimistic about this renewal. The company expects this deal to improve outcomes and participant benefits, which will reinstate the value of Healthways’ health and well-being solutions worldwide.

We are optimistic about the My Health Guardian program as recent data suggests that chronic illness, which currently accounts for 70% of Australia’s national disease burden, is going to increase to 80% by 2020. In addition, HCF’s strong customer base of 1.5 million Australians will add impetus to the company’s growth. This particular model from Healthways encourages people to make favorable lifestyle changes that lead to enhanced well-being, reduced healthcare costs, improved performance and economic value for customers.

According to Heathways, 32% of the My Health Guardian plan users have successfully improved their Perception of Health Score, 46% have reported better medication management as well as lower lifestyle risk factors such as smoking rate, physical inactivity, obesity and poor diet.

Healthways has invested in technology platforms that provide scalable support for large populations. The company has alliances with a majority of the U.S. health plans and has a huge clientele. Due to its unique scalable business model, Healthways’ shares may present a long-term investment opportunity, although it faces many challenges in the short term.

Currently, Healthways retains a Zacks Rank #3 (Hold). Among other stocks in the industry,Natus Medical (BABY), Wright Medical Group Inc. (WMGI) and ResMed Inc. (RMD) appear impressive. These stocks carry a Zacks Rank #1 (Strong Buy).

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